1983--99: Growing A Business; Increasing Philanthropy
What had begun as a lark quickly took on a life of its own. The Olive Oil & Vinegar dressing was soon followed by Newman's Own salad dressings in varieties including Caesar, Creamy Caesar, Balsamic Vinaigrette, Italian, Ranch, and others. Success inspired Newman and Hotchner to branch out into other food items, and the Newman's Own product lines grew to include pasta sauce in seven varieties, steak sauce, Bandito salsa in three strengths, Old Fashioned lemonade, and Picture Show popcorn. By 1987 the company was growing at about 20 percent per year. Only five years after the company's inception, Grocery Marketing reported that the success of Newman's Own appeared to be due to the combination of the popular Paul Newman image on the product labels, a strong public relations effort, and quality products that inspired repeat sales. Each year the company showed increased earnings, grossing $36 million in 1988. The next year the company realized a reported 16 percent pre-tax profit, about five times the 3.4 percent food industry average.
The company's finances remained an internal affair, while manufacturing and distribution were subcontracted out to various concerns around the United States. The pasta sauces were manufactured in Rochester, New York; the popcorn was packaged in Iowa and Illinois; the salad dressing was bottled in Fullerton, California, and Framingham, Massachusetts; and the lemonade was created in various locations throughout the country. Supermarkets and giant chain stores such as Wal-Mart and Kmart were responsible for 90 percent of all sales. As the company grew, opportunities for increased profits and visibility were sought. One such opportunity came with an alliance between Newman's Own and Burger King Corporation, with good results. In 1990, the fast food chain reported that by adding Newman's Own salad dressings to its offerings, the company doubled its salad dressing sales for the month of July.
A notable aspect of Newman's Own's success was the company's lack of advertising. However, the food labels themselves&mdash′inted with an illustration of actor Paul Newman's face smiling out at the consumer--served to create an easily identified brand identity. The Newman image on the label was often cleverly customized to illustrate the product, for example, putting the actor in a sombrero on the salsa labels, adding steer horns to his head on the steak sauce bottle, or translating his image into a 'Roman' bust for the Caesar dressing. The witty, tongue-in-cheek marketing copy on the labels, which seemed almost to poke fun at the Newman's Own enterprise, added to the products' appeal. The company said that the label and promotional copy were written by Paul Newman and A.E. Hotchner themselves, who imbued it with their distinctively off-beat sense of humor. For example, the Sockarooni spaghetti sauce label claimed that it 'delivers a zesty twist that will knock your socks off,' while the 'Virgin' lemonade label said it was 'made from lemons that have never been squeezed.' This irreverent marketing approach seemed to wink at the consumer while promoting a line of high-quality, all-natural food products.
For publicity, the company turned to charitable events. In 1990, Newman's Own and Good Housekeeping magazine began sponsoring an annual national recipe competition. To be eligible, every recipe entry needed to include a Newman's Own food product among the ingredients. The recipes were chosen from thousands of submissions from around the United States, and the final judging was held at prestigious venues such as New York City's Rainbow Room or the Waldorf Astoria hotel. Each year, several recipe semi-finalists were chosen, and a professional chef prepared the recipes. To lend excitement to the event, Newman and Hotchner personally tasted the resulting creations, with Newman's wife, actress Joanne Woodward, sometimes joining in. The top prize of $50,000 was given to a worthy cause of the recipient's choice, with smaller prizes given to the runners-up, as well as to favorite charities of selected supermarkets that sold Newman's Own products. The contest judging and Good Housekeeping received good publicity, helping to market Newman's Own products while promoting a high-profile charitable event.
With the steady growth and increasing success of Newman's Own the company remained fully committed to charity, with Paul Newman continuing to give away 100 percent of after-tax profits in the form of grants to non-profit organizations. At the end of each year, Newman and Hotchner sat down together to review grant applications personally and divide the year's profits among educational and charitable organizations that they deemed most in need of assistance. As Paul Newman's charitable giving became more widely known, more and more organizations began to apply for aid. As early as 1993 there was a notable increase in applications, from 1,500 up to 2,500. In that year alone, 460 applicants were given aid.
http://www.fundinguniverse.com/company-histories/Newmans-Own-Inc-Company-History.html
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(250 posts)
Send PM |
Profile |
Ignore
